Correlation Between Aberdeen Select and Aberdeen China
Can any of the company-specific risk be diversified away by investing in both Aberdeen Select and Aberdeen China at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aberdeen Select and Aberdeen China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Select International and Aberdeen China Oppty, you can compare the effects of market volatilities on Aberdeen Select and Aberdeen China and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aberdeen Select with a short position of Aberdeen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Select and Aberdeen China.
Diversification Opportunities for Aberdeen Select and Aberdeen China
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aberdeen and Aberdeen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Select International and Aberdeen China Oppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen China Oppty and Aberdeen Select is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aberdeen Select International are associated (or correlated) with Aberdeen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen China Oppty has no effect on the direction of Aberdeen Select i.e., Aberdeen Select and Aberdeen China go up and down completely randomly.
Pair Corralation between Aberdeen Select and Aberdeen China
Assuming the 90 days horizon Aberdeen Select International is expected to generate 0.48 times more return on investment than Aberdeen China. However, Aberdeen Select International is 2.07 times less risky than Aberdeen China. It trades about -0.17 of its potential returns per unit of risk. Aberdeen China Oppty is currently generating about -0.09 per unit of risk. If you would invest 3,063 in Aberdeen Select International on August 30, 2024 and sell it today you would lose (106.00) from holding Aberdeen Select International or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aberdeen Select International vs. Aberdeen China Oppty
Performance |
| Timeline |
| Aberdeen Select Inte |
| Aberdeen China Oppty |
Aberdeen Select and Aberdeen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Select and Aberdeen China
The main advantage of trading using opposite Aberdeen Select and Aberdeen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Select position performs unexpectedly, Aberdeen China can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Aberdeen China will offset losses from the drop in Aberdeen China's long position.| Aberdeen Select vs. Vanguard Strategic Small Cap | Aberdeen Select vs. Guggenheim Diversified Income | Aberdeen Select vs. Pgim Jennison Diversified | Aberdeen Select vs. Blackrock Sm Cap |
| Aberdeen China vs. Artisan Small Cap | Aberdeen China vs. Champlain Mid Cap | Aberdeen China vs. Small Midcap Dividend Income | Aberdeen China vs. Growth Fund Of |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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